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Lord Mackay of Ardbrecknish: These amendments, which were debated and withdrawn in another place, seek to give discretion to the Inland Revenue, Customs and Excise and other government departments to supply certain information which they hold directly to local authorities.
Clauses 1 and 2 provide that the Inland Revenue, Customs and Excise and some other government departments and persons providing services to them may disclose information to the DSS and the Northern Ireland department for use in detecting and preventing social security fraud and for use in checking the accuracy of social security information and, where appropriate, amending or supplementing it.
The proposed Sections 122(3) and 122B(3) provide that information supplied to the DSS in that way shall not be supplied to any other person or body except in limited specified circumstances where it could lawfully have been provided direct under subsection (2) or where it is required in connection with civil or criminal proceedings under the Social Security Contributions and Benefits Act, the Social Security Administration Act and the Jobseekers Act, or their Northern Ireland equivalents, or where the provisions of this Bill would enable it to be supplied to local authorities.
Those provisions for onward supply to local authorities are in the proposed Section 122C of the 1992 Act inserted by Clause 3. We have not yet debated that clause but perhaps I can talk about its effect in the context of these amendments. That may be the most useful way of explaining to the noble Baroness what will be the position as we see it.
As a whole, Section 122C is intended to permit but not require the Secretary of State to supply information which he holds to local authorities for the purposes of
their administration of housing and council tax benefit. The provision is similar to the existing provision in Sections 127(1) and 128(1) of the Social Security Administration Act, which this Bill would repeal.However, where the Secretary of State holds information which has been supplied by the Inland Revenue, Customs and Excise or another government department, under Sections 122 or 122B the supply of that information to local authorities is limited further in that its use by local authorities is restricted to the prevention, detection, investigation and prosecution of offences relating to housing and council tax benefit and to checking the accuracy of information relating to those benefits and, where appropriate, amending or supplementing it.
The amendments propose that the relevant government departments should be able to supply information directly to local authorities for similar purposes to those for which they could supply information to the DSS. While working through the proposals for the Bill, we recognised that some local authorities have asked to be supplied with relevant Inland Revenue information. The report of the Social Security Select Committee on housing benefit recommended that Inland Revenue information be used to help in the prevention and detection of serious social security fraud, especially housing benefit fraud.
We looked carefully at that possibility. As my colleague in another place explained, the Inland Revenue has substantial powers to require individuals to provide certain information about their income, assets and personal circumstances. Action can be taken against those who fail to provide that information or who supply incorrect or incomplete information. In return, the general principle is that such information should be confidential and only used for other purposes where there is an overriding public interest in doing so. It is important that public confidence in that general principle is preserved.
We concluded that it would be in the public interest for Inland Revenue information to be used for the detection of social security fraud and to check the accuracy of social security records. It is possible to do this in conditions of high security as, in fact, we have for the data matching that we already undertake inside the department. We shall then have access to raw information and raw data and that information will be limited to a handful of selected officials. Only once a suspicious inconsistency has been identified would the specific information involved be passed to trained officials for further investigation. Therefore, by ensuring that information from other government departments is supplied just to the DSS, we are ensuring that there is central control and clear lines of accountability over the use of that information within the social security system. Those were matters which rightly concerned Members of the Committee opposite earlier this afternoon.
However, in its use of the data, the DSS will be able to conduct data matching not only to detect fraud in the benefits administered by the Benefits Agency but also housing benefit and council tax benefit administered by local authorities. We already run a housing benefit
matching service which can compare housing benefit claim information supplied by local authorities with other information already held in the DSS. In due course, under the provisions already in the Bill, it will be possible for the DSS to match Inland Revenue information with information supplied by local authorities and thereby alert local authorities to specific inconsistencies which need further investigation.In addition, it is possible that, in the light of experience of a specific operational requirement, there is a case for other instances of onward supply of information as provided for in Section 122C(3) of the 1992 Act. The DSS will have regard to any representations made by the Inland Revenue and local authority associations as to how information is to be supplied as a result of the Bill.
There has been a great deal of interest in allowing local authorities to have the information direct. We have carefully considered whether there might be overriding advantages in such an arrangement but have concluded that there are not. The amount of fraud left to be detected by local authorities using data matching techniques, after the DSS has already processed the same set of information, would duplicate the effort for very little, if any, additional rewards. At the same time, because of the large number of local authorities involved, a much wider range of people would have access to the raw information. We do not consider that the extra degree of disclosure and the extra risk of leakage is justified by the potential increase in the detection of fraud over and above what the housing benefit matching service could achieve.
I appreciate the point made by the noble Baroness about the need for local authorities to be able to take advantage of the information that we receive. However, when we have completed the data matching, then, within our fairly secure, one-site tight team, we shall, via the housing benefit matching service, be able to help local authorities in data matching. It will be done on one site. I cannot remember how many local authorities there are in the country. However, if we can provide a reasonable method to enable those authorities to receive the assistance and help data matching can bring to them, I believe that it is best that we do so through the central DSS system and that we do not encourage or allow the setting up of many small data-matching services all over the country.
Earlier this afternoon, Members of the Committee were concerned about the question of security in such matters. I believe that that is one of the balances. I also believe that the system gives us the right balance and that it gives local authorities the help and assistance that they rightly wish and require so as to help them root out fraud in housing benefit. With those assurances regarding the importance that we attach to helping local authorities in that regard, I hope that the noble Baroness will feel able to withdraw her amendment.
Lord Carter: Before my noble friend decides what to do with the amendment, I should like to mention an interesting point that has just occurred to me. I was struck by the words "a suspicious inconsistency" which the Minister used. So far as concerns personal taxation,
the Inland Revenue is now going over to the new system of self-assessment which, to put it at its kindest, is not being introduced without its problems. Can the Minister say whether the department is entirely satisfied with the data matching where the information has been provided by the Inland Revenue through self-assessment? Is it not the case that many suspicious inconsistencies will come to light, simply because the people who are filling in such forms do not have the first idea as to what they are actually doing? I happen to know that that is so in many cases.
Lord Mackay of Ardbrecknish: I believe that takes us a little wide of the Bill's provisions. However, I understand that the Inland Revenue accepts that there will be teething troubles on self-assessment. Nevertheless, given its clientele it is believed that self-assessment will work. I do not know whether the noble Lord, Lord Carter, is aware of the penalties involved for supplying incorrect information but I should point out to him that they are fairly significant. They will be a considerable incentive in ensuring that people fill in the self-assessment forms both accurately and correctly. But that is a matter for the Inland Revenue.
In the light of possible inconsistencies in the data of the Inland Revenue, I believe I am being asked whether that would increase our problem. We must cross that bridge when we come to it. It is to be hoped that the Inland Revenue will be able to resolve the difficulties in self-assessment and that it will work perfectly well, as I understand it does in many other parts of the world. Therefore, the problem should not arise. Of course, there can be inconsistencies both ways, even in the current system. Provisions will be put in place to allow for such inconsistencies to be dealt with, whichever way they occur.
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